QI Don't Want To Pay The High Costs Of A Used Car Loan From A Bank Or The Car Dealer Where I'm Going To Buy A Car From. Is It A Good Idea To Take Out A Home Equity Loan, Which Has A Lower Interest Rate, And Use The Loan Money To Purchase The Car?
AThe answer to that question would depend on whether or not you are comfortable with putting your home up as collateral for the purchase of your used car. If you don't make the car payments on a used car loan, you lose your car; if you don' make the payments on your home equity loan, you lose your house. That's not to say that using the equity in your home to save money on interest is a bad idea; it's just that you'd better be sure you can make your monthly payments without a problem so your home isn't put in jeopardy. If you have good credit, you may qualify for a low-interest used car loan, which would be the ideal situation. If, however, you really need to purchase a vehicle and you don't qualify for a low-interest used car loan, the equity in your home can give you a helping hand. Just make sure that you pay off the loan as quickly as possible and don't miss a single payment. If you are able to manage your finances responsibly, a home equity loan can be a great way to finance your vehicle.